01 Eric Hayes FINNISH FOREIGN POLICY PAPERS 01, September 2011 FROM COLD WAR TO COMMON CURRENCY A personal perspective on Finland and the EU ULKOPOLIITTINEN INSTITUUTTI UTRIKESPOLITISKA INSTITUTET THE FINNISH INSTITUTE OF INTERNATIONAL AFFAIRS FROM COLD WAR TO COMMON CURRENCY: A personal perspective on Finland and the EU by Eric Hayes Eric Hayes is a former official of the European Commission, who served in a number of capacities involving responsibility for the EU’s relations with Finland, most notably as Ambassador and Head of the Commission’s Delegation in Helsinki from 1993 to 1995. Since retiring from the Commission in 2007, he has written and lectured on a range of EU-related themes. The Finnish Institute of International Affairs Kruunuvuorenkatu 4 FI-00160 Helsinki tel. +358 9 432 7000 fax. +358 9 432 7799 www.fiia.fi ISBN: 978-951-769-318-9 ISSN: 1799-9553 The Finnish Institute of International Affairs is an independent research institute that produces high-level research to support political decision- making and public debate both nationally and internationally. The Institute undertakes quality control in editing publications but the responsibility for the views expressed ultimately rests with the authors. The copyright to the text resides with the author. TABLE OF CONTENTS Preface 4 I A Piano Lesson in European Realpolitik 7 II Casting in Finnish Waters 12 III The European Waiting Room 18 IV The Dam Bursts 23 V The Race Begins 36 VI To Helsinki 39 VII Neutrality: The Dog That Didn’t Bark 47 VIII Åland Aspirations – and EU Anxieties 57 IX Agricultural Agonies 66 X Shakespeare and Elvis Presley 75 XI Towards The Referendum 80 XII The Final Furlong 89 Epilogue: Impressions and Realitites 94 Appendix – Timeline of Key Events 98 Bibliography 100 PReface inland’s decision to apply for member- Finland, unlike the others, would not become ship of the European Union1 was, in the “Sovietised”.4 Fwords of President Koivisto, “one of Instead, Finland spent the next four dec- the most important taken during Finland’s ades pursuing a careful geo-political balanc- independence”.2 Certainly, the sudden geo- ing act that sought pragmatically to combine political volte-face performed by Finland in the economically necessary with the politi- the early 1990s, culminating in her accession cally feasible. In so doing, Finland managed to the EU in January 1995, was one of many not only to set herself clearly apart from the remarkable chapters in the fundamental re- rest of the post-War Soviet sphere of influ- structuring of Europe’s political and secu- ence; but also to participate from an early rity architecture that took place in the closing stage in the economic integration of Western decade and a half of the twentieth century Europe. That this – highly successful – policy – even though many Finns would argue that should have inspired the derogatory term it was no more than the continuation, in a dif- “Finlandisation” has always seemed to me ferent geo-political environment, of Finland’s rather harsh on the Finns, who were after traditional policy towards European integra- all just seeking to make the best of the cards tion. Either way, it is a development that they had been dealt by others. Considerations has received relatively little attention from of Realpolitik – namely the paramount need non-Finnish commentators. Most have pre- to maintain friendly relations with Moscow ferred instead to focus on the nine countries, – ruled out any possibility of closer political formerly part of the Soviet Bloc, that became relations with the West. Even after the col- Member States of the European Union in 2004 lapse of the Iron Curtain and the reunification and 2007: the “Visegrad Four”, the Baltic of Germany, Finland proceeded with great States, Bulgaria and Romania. caution. Yet Finland too was consigned by the vic- Then, early in 1992, emboldened by devel- torious Allies at the end of World War II to opments in Moscow, and under the economic the Soviet sphere of influence. Initially, her pressure of Sweden’s sudden decision to apply position looked in some respects even more for EU membership, Finland’s political lead- precarious than that of some of her Central ers seized the narrow window of opportunity and Eastern European neighbours.3 Luckily that suddenly presented itself to confirm at for Finland, however, she had not been oc- last, urbi et orbi, Finland’s identity as a West- cupied by the Red Army and had throughout ern European nation, not only economically the War retained intact her pluralist demo- but also politically. cratic institutions. Not only was there a broad In tabling her application for membership political consensus; but the Finnish Social at that time, Finland ensured her participa- Democratic Party (unlike some of its coun- tion in the 1995 wave of EU enlargement. Had terparts elsewhere) was anti-Communist and she not done so, Finland might well have end- Western-oriented. Finland’s geo-strategic ed up joining the EU in 2004 alongside those position – sitting as she did at the northern Central and Eastern European countries that edge of Europe – was moreover, from Mos- had formally been part of the Warsaw Pact. As cow’s perspective, rather different from that it was, Finland demonstrated once again that of other countries in the Soviet sphere. By she was in a different class. At the same time, the mid-1950s it was becoming clear that Finland’s accession to the EU was an impor- tant positive signal for those other aspirants on whom the Soviet yoke had fallen rather harder over the previous half-century. 1 In the text that follows, I have generally used the By virtue of the successive functions I held more correct term “European Communities” (EC) prior in the European Commission during the 1980s to the finalisation of the Maastricht Treaty in 1992. 2 Finland and the Evolution of Europe: Address to the Plenary Session of the European Parliament, 16 Nov 4 Finland did not join the Warsaw Pact when the latter 1993 (Ulkoasiainministeriö: Ulkopoliittisia Lausuntoja ja was created in 1955, but chose to join the Nordic Asiakirjoja 1993, p.246) Council. The following year, Moscow returned the 3 Saarikoski (2002) Porkkala military base to Finland. 5 and 1990s, I was a privileged outside observer of this unexpected, and ultimately breath- takingly rapid, transformation of Finland’s geo-political status. The narrative that fol- lows is, inevitably, only a personal and par- tial account of what happened during those momentous years, based on my notes, diaries and recollections. I have however sought, wherever possible, to check these against other accounts of the events covered.5 I have also benefitted from many helpful comments and suggestions from those closely involved on the Finnish side, in particular Heikki Haavisto, Veli Sundbäck, Erkki Liikanen, Antti Kuosmanen, Pekka Huhtaniemi, Esa Härmälä, Eikka Kosonen, Leif Blomqvist, Esko Hamilo and Niilo Jääskinen. Particular thanks are due to Pertti Salolainen, without whose constant encouragement this account would probably never have seen the light of day. 5 I have relied in particular on Kuosmanen (2001), Liikanen (1995) and Granell (1995); and also, more generally, on Koivisto (1997) and Jakobson (1998). I am indebted to the Archives of the Ministry for Foreign Affairs of Finland for their assistance in checking the details of early ministerial contacts, as well as to the EFTA Secretariat in Geneva, who kindly permitted me to check a number of points against material in their archives. 6 Photo: Marko Helin / Wikimedia Commons I A PIANO LESSON IN EUROPEAN REALPOLITIK y first exposure to the geo-political negotiations for an all-European Free Trade complexities of Finland’s relations Area.7 However, when the European Free Mwith the rest of Europe was in August Trade Association (EFTA) was founded in 1981. It was, although I was blissfully una- 1960 by Finland’s three Nordic neighbours ware of this at the time, a textbook example together with the UK, Austria, Switzerland of the Paasikivi-Kekkonen line in action. and Portugal, Finland, after some delicate I was then a junior official in the trade de- manoeuvring,8 negotiated Associate Mem- fence section of the European Commission’s bership of the organisation. This effectively Directorate General for External Relations. I extended the Free Trade Area to Finland, but had never set foot in Finland before. I was, did not allow her to participate in the delib- like most Western Europeans, including erations of the EFTA Council; the formal de- most European Commission officials at that cisions of the latter being applied to Finland time, deeply ignorant about Finland and all by separate subsequent decision of the FIN- things Finnish. For most people, Finland was EFTA Joint Council. Finland was similarly ex- the home of Sibelius and/or the origin of the cluded from EFTA’s contacts with other in- term “Finlandisation”. For those addicted ternational organisations. Later in the 1960s, to spy fiction, it was a presumed hot-bed attempts were made to conclude a Nordic of East-West intrigue. A well informed few Economic Area (NORDEK) between Fin- were aware of Finland’s role as the originator land, Denmark, Norway and Sweden. These of the “Helsinki Process” (which led to the however collapsed in 1970, partly owing to creation of the C.S.C.E and subsequently the pressure by Moscow on Helsinki, but also O.S.C.E.). because Denmark and Norway had by then Urho Kekkonen’s long Presidency was concluded that their own futures lay with in its final declining days. The Cold War was the European Communities (EC). Shortly still at its height. Ronald Reagan had just thereafter, Finland renewed for a further 20 that January taken over the White House.